HE FORGOT – HE MADE:

The client while searching for something stumbled upon a very old investment he made and completely forgot about it.

In 1995, he has invested Rs.5000 in initial allotment of Reliance Vision Fund.

He wanted the advisor to check the value.

When he checked the same on August 10th (NAV as on August 9th), the value was Rs.2,76,166.

His initial investment has multiplied by 55 times over 22 years. It works out to an annualised return of 20%.

He acknowledged that but for his forgetting, he would not have kept the investment this long.

Many of our clients have said that after becoming our client, they are convinced about the benefit of holding equity for long term.

Reliance Vision Fund has been one of the average performers. In the last many years, it has never been a chart topper.

As we always say, as long as we avoid certain kind of funds and some fund houses, any diversified equity fund would do well over long term. What we avoid is more important than what we choose. All that is required to have 4 or 5 good diversified equity funds in a portfolio.

We select good funds, but our main job is to ensure that you hold equity funds for a minimum of 10 years and preferably couple of decades.

If only you can do that, I don’t see why you cannot be very wealthy.

Luckily for the above said client, he forgot. He may even wonder why he invested only a small sum instead of committing few lakhs, which he was capable of even two decades ago (as per the info from the advisor).

You’ve heard this John Bogle’s quote from me many times. Please listen now for one more time.

“Stay the course. No matter what happens, stick to your program. I’ve said ‘stay the course’ a thousand times, and I meant it every time. It is the most important single piece of investment wisdom I can give to you.”